Disappointments? Think Opportunities

What's the matter with Facebook (FB)? Wasn't it the world's greatest quarter? Didn't it totally deliver on every metric? Doesn't it have accelerating revenue growth, increasing user engagement and the ultimate in worldwide reach?

Yes, it has all of that and much more. But here's what Facebook did best on the call: underpromise about the future. These guys basically spent a huge part of the call telling you that things are going to slow, that they aren't going to monetize things that we thought were about to be monetized and that in the end they are now just a company with really fast growth in earnings. This market doesn't just want really good earnings growth any more. It wants a dividend. It wants a buyback. It wants financial discipline. It doesn't want a company spending like a drunken sailor even as I get the sense that the sailor's really at the top of his game.

So the stock after opening strong didn't rally; it sold off.

Here's the rub. Unlike a lot of the stocks that have sold off because they are just a multiple of sales, not earnings, Facebook is actually an inexpensive stock. I don't know what's going to happen tomorrow with the stock. I do know that companies with tons of opportunities and great growth do reward their shareholders. I think this is an opportunity, not a disappointment.

I feel the same way about American Airlines Group (AAL). This $27 billion company, which has $10 billion in cash, reported magnificent sales and earnings this morning. I can't believe how much money it made. It seemed like an aberration. And you know what? It was. It was aberrantly low because of all of the cancelled flights. Who knows what it can earn now that the skies are friendly. But it had the misfortune to report on the same day at United Continental (UAL) and that was the one airline, the only airline, that truly has delivered a nightmare number. It obliterated the glory of American. If the company had reported yesterday, it probably would be through $40 instead of being "stuck" at $38.

Finally, there are two others that I am not giving up on even though the market sure has: Xilinx (XLNX) and Celgene (CELG). These two stocks, both owned by my charitable trust, were obliterated today and I am not happy. It's always nasty when you own a big loser. They make you feel like a loser. That's me -- a real loser because the trust owns these. Hey, I talk about the winners, bring on the losers.

Xilinx's crime? It reported a very strong number but gave horrendous guidance. This isn't the first time it has done that. Several times the company's stock has moved intra-quarter only to be reined in by management. This time CEO Moshe Gavrielov didn't just rein the stock in, he lashed it, slashed it and sent it to the glue factory. We bought some on the weakness. But it was a killer.

And Celgene? I was scratching my head how its best-selling drug, Revlimid, could fail to deliver on its sales line, causing the company to commit the ultimate sin of reporting an in-line quarter. All that said, Celgene reaffirmed guidance and the stock's selling at the same price-to-earnings multiple as some of the low-single-digit big-pharma plays. Except it doesn't have a dividend. I think 10 days from now it will settle down and perhaps even begin to go higher. But, ultimately, it's just too cheap to be this hated. Heck, it's beginning to feel like Apple (AAPL) before the report -- not after.

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